Independent Group to Look at Ways to Reduce Debt

By JACKIE CALMES

Published: January 25, 2010

Just as President Obama and Congressional Democrats are trying to create a bipartisan commission on reducing the debt, some well-known former elected officials and veterans of past administrations are announcing their own task force on Monday, underscoring the mounting concern over the nation's fiscal future.

The timing of the group's formation is coincidental, organizers said. Yet the outside group, including prominent Democrats and Republicans, could provide pressure and political cover for the parallel effort by the administration and Congressional leaders to consider both unpopular spending cuts and tax increases.

The blue-ribbon group of 18 to 20 members will be led by Pete V. Domenici, a Republican former senator from New Mexico who for years was the chairman of the Senate Budget Committee, and Alice Rivlin, a Democrat and former budget director for both Congress and President Bill Clinton who is also a former vice chairwoman of the Federal Reserve.

Their goal is to, by December, give Congress and Mr. Obama a multiyear plan to raise tax revenues and pare spending, especially for the Medicare and Medicaid programs, which are the biggest factors driving the projections of future high deficits, Mr. Domenici and Ms. Rivlin said in a joint interview.

That puts their task force on the same timetable as the commission that the president and senior lawmakers, including a few Republicans, are considering.

The Senate is to vote Tuesday on bipartisan legislation that would create an 18-member commission, consisting mostly of lawmakers and administration officials, and would bind Congress to vote on its recommendations in December, after the midterm elections.

But the bill is expected to fail, despite Mr. Obama's endorsement on Saturday, because most Republicans say it would force higher taxes and some liberal Democrats oppose the prospect of cuts for entitlement programs.

If the bill is defeated, Mr. Obama is poised to announce, perhaps in his State of the Union address on Wednesday, that he is establishing a bipartisan commission by executive order. While he could not require Congress to hold votes on any recommendations of a presidential commission, Democratic leaders have tentatively agreed that they would.

House and Senate Republican leaders have indicated that they will not cooperate in any commission that considers raising taxes.

''Spending is the problem,'' Senator Mitch McConnell of Kentucky, the Senate minority leader, said on the NBC program ''Meet the Press'' on Sunday. ''I do worry that if we construct this commission in the wrong way, it will be kind of an indirect way to raise taxes.'' And ''raising taxes in the middle of a recession is not a good idea,'' he added.

But Mr. Domenici said: ''We have to consider everything. We have to put taxes on the table.''

Both he and Ms. Rivlin also emphasized that the task force would not be recommending spending cuts or tax increases that could undermine the economy's recovery and job creation. Instead, they said, it will propose long-range policy changes.

Mr. Domenici said that some elected officials in his party mistakenly argue that ''Republicans shouldn't have to do this because Democrats accrued all the debt last year.'' In fact, most of the current $12 trillion debt results from policies adopted in the past decade when Republicans controlled the White House and Congress.

''There is nothing good for America that will come out of arguing which part of the debt each party is responsible for,'' Mr. Domenici said.

The outside group is sponsored by the Bipartisan Policy Center, which was formed by four former Senate majority leaders -- Bob Dole and Howard Baker, Republicans, and Tom Daschle and George Mitchell, Democrats. Mr. Baker and Mr. Daschle will outline the task force on Monday.

Other members will include two former governors, James J. Blanchard, Democrat of Michigan, and Frank Keating, Republican of Oklahoma.